'U.K. real estate market in terrible state'

The real estate markets in Britain and France are still reeling, said Fishman, whose property investments are scattered worldwide. But of the two, France is in better shape. In contrast, he thinks the property markets in Sweden and Norway will recover in a year or two.

In western Europe generally, tenants are whimpering about the rent but still paying it, he added. In the United States, however, they are abandoning the properties.

The Swiss real estate market was not affected at all, Fishman said. Financing is available for new and existing properties alike, if not from the big banks then from the small ones.

But he is pessimistic about Britain. "The situation there is still terrible," he said. "I read in the papers that Israeli businessmen are storming London. We didn't go there, and I don't recommend that you invest there either."

Whereas elsewhere, rental prices tend to be revised yearly, in Britain the custom is to revise the rent upward every five years, Fishman said. Thus it takes a long time for property values to increase.

"Investment in yield-generating property in Britain is like buying a bond unlinked to inflation that yields 7%," he said. "You don't need to go to Britain for that. You can buy bonds like that here in Israel, at yields of 5.5% to 6%."

He pointed out that the big Israeli businessmen are not doing deals in England - not Nathan Hetz of Alony Hetz, and not Nochi Dankner, who decided not to close the British Lands Broadgate Estate deal. (Last week, Dankner's Property & Building company told investors that it had halted talks to buy a minority stake in the London complex.) "That shows London isn't attractive yet," Fishman concluded.

Nor is Fishman sanguine about the prospects of property developers in eastern Europe, which had become a favorite venue among Israeli real estate speculators.

"Anybody who sold bonds to invest in eastern European property had better not count on returning the money in the next two or three years," he said. "It won't happen. I don't see any movement in Ukraine or Bulgaria in the coming years, and I don't see anybody financing the projects. The banks in those countries have been battered and won't lend a sou, even at interest rates of 15%. And don't think that our situation [that of the Fishman group] is any better than that of other companies operating in those areas."

He turned more upbeat when the talk turned to Russia, where the Fishman group operates through London-listed MirLand. Lending did not go overboard there, he explained. Demand has not disappeared, but money for investment there has to come from elsewhere.

"Everybody says the situation of yield-generating property in Israel is excellent, while in Russia it's terrible," he said. "Sometimes, I disagree." If oil does not fall below $60 per barrel, Russia will be fine, he concluded.

As for India, where Fishman has been investing through his company Mondon, he had this to say: "There's no problem in the real estate market there. You can't get financing, but demand hasn't evaporated."